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Our Greater Palm Springs real estate market experts, Market Watch LLC, have just released their December 2019 Desert Housing Report, revealing the state of the Coachella Valley’s residential real estate market in December. Some of the highlights:
The Coachella Valley median detached home price at the end of 2019 was $425,000 (9.0% above the median detached home price of $389,944 in December 2018 and the highest on record).
The Coachella Valley median attached price at the end of 2019 was $279,000 (2.0% above the median attached home price of $273,000 in December 2018). Market Watch stated that over the long term, median attached home prices appear to be growing at a 3% annual rate. Market Watch noted that we are entering the traditionally strong seasonal period for attached homes and should watch median attached home prices over the next 4 to 5 months.
Median detached home prices rose in eight of the nine Valley cities year-over-year (ranging from gains of 11.9% in Rancho Mirage, 9.9% in Cathedral City, 6.0% in Palm Desert, 4.7% in Palm Springs and 1.0% in La Quinta). Median detached home prices decreased year-over-year by 14% in Indian Wells. In Palm Springs, the median detached home price was 11.6% higher than the previous high median detached home price in 2006/2007. In all other Valley cities, median detached homes prices remained below the 2006/2007 highs (ranging from -7.9% in Indio to -31.1% in Indian Wells). The median attached home price increased year-over-year in four Valley cities (ranging from +0.6% in La Quinta to +8.4 % in Palm Springs). The median attached home price decreased year-over-year in four Valley cities (ranging from -1.3% in Palm Desert to -40.2% in Desert Hot Springs). Median attached home prices remained below the 2006/2007 high median attached home price in all Valley cities (ranging from -24.0% in Palm Springs to -67.8% in Desert Hot Springs.
Total Coachella Valley home sales averaged over the last three months were 712 units per month (vs. 685 units per month in December 2018). Detached home sales averaged 502 units per month (up +12.3%from the detached home sales of 447 units per month in December 2018). Attached home sales shrank to an average 210 units per month from 238 units per month in December 2018.
On a city by city basis, six Coachella Valley cities (Coachella, Desert Hot Springs, Indian Wells, La Quinta, Palm Desert and Rancho Mirage) had higher three-month average sales year-over-year. Two Valley cities (Cathedral City and Palm Springs) had lower three-month average sales. Home sales were up 42.0% year-over-year in Coachella, up 20.0% year-over-year in Rancho Mirage, up 14.0% year-over-year in Desert Hot Springs and up 10.4% in Palm Desert.
On a price range basis, home sales in the price brackets under $300,000 continued to decline. Home sales were up 8% in the $300,000 to $400,000 price range, up 37% in the $500,000 to $600,000 price range and up almost 22% for homes priced at one million dollars and higher.
Coachella Valley housing inventory stood at 2,998 properties on January 1st (significantly lower than any January 1st level for the past 5 years). Market Watch noted that the long-term trend of declining Coachella Valley housing inventory is continuing to make the Coachella Valley housing market a seller’s market.
Months of sales is the ratio of inventory divided by the sales rate and provides a measure of how long it would take to sell the entire housing inventory at the current sales rate. The current months of sales ratio of 3.7 months was lower than the 4.1 months of sale ratio on January 1st of last year (due to the combination of lower inventory and higher sales than in December 2018). Market Watch opined that a month of sales ratio this low usually points to higher prices. This view is reinforced by the median number of days it’s been taking to sell a home (50 days, the lowest number in the last five years).
In looking at the months of sales ratio in the different price brackets, except for homes selling in the $900,000 to one million dollar price bracket, the month of sales ratio was lower in all price brackets compared to December 2018. For homes priced over one million dollars, the months of sales dropped to 9.4 months from 12.6 months year-over-year.
In looking at the months of sales ratio for the different cities in the Coachella Valley, the months of sales ratio declined in eight cities, increased slightly in two cities and increased significantly in Thousand Palms. Market Watch felt that this chart supports their opinion that the housing market appears healthy, not only in all price ranges, but in each city as well.
The December Sale Price Discount from List was -1.8% (2/10 of a percent less than a year ago). The current reading is the lowest in five years and implies the average home in the region offered at $400,000 sold for $392,800.
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